Early Fees

Posted on May 27, 2008

You’re always subject to late fees when you don’t pay your bills on time but cellphone service providers have been more known for their early fees. Ever decided a few months into a one or two year contract that you weren’t happy with the service, reception, billing, or whatever and thought you would just cancel? I hope you read the fine print because your getting out or early fee may be as much as you would pay if you stayed on.

Consumers have complained strongly about those fees for years and now regulators are beginning to take note and enter discussion with providers about them. Most carriers charge this very high fee because they subsidize the user’s account by letting them have the latest phones with little or no upfront money. The problem has been that over, say a two year contract, the early fee never goes down for most providers. So, if you decide to cancel two months prior to a two year contract, you would still owe the same amount as if you had canceled two months into the contract.

Verizon says it is trying to forge a deal with consumer groups and regulators that would reduce the fees customers are charged when they cancel their cell phone service early.

The FCC says the two sides have made “substantial progress”, although there is still no final consensus.

Verizon already prorates the early termination fees, reducing them as customers’ contracts get closer to expiring. AT&T is scheduled to begin prorating the fees starting the first of June. Sprint Nextel has indicated it will do so by the end of this year.

Here’s a better solution for you. Stay off the telephone so much and you can get by with a GoPhone or TracFone. Pay as you go. No strings attached, no early fees. Don’t like your phone, get another one. Don’t like your provider, get another one. Simple. I manage to keep a phone for emergency and ‘important uses’ only. 25 bucks for three months service and I always have minutes to roll over. Life is simple…